A quarter of a million square metres of retail space is in Melbourne’s construction pipeline over the next 24 months with nearly 180,000 square metres to be delivered by May next year, according to
Savills Australia’s latest retail research.
The Quarter Times Report found the Large Format sector, formerly Bulky Goods, would account for a significant amount of the new space with three projects totalling nearly 60,000 square metres due for completion by mid 2015, while regional centre extensions would add a further 70,000 plus square metres to the market with delivery due in May 2016.
According to Savills Australia’s Victorian Head of Research, Glenn Lampard, the figures are remarkable as planning for many of the projects began during Melbourne’s bleakest retail period in a decade.
"This construction phase was planned and executed during some difficult times for retailers, a period you might call `the retail revolution’ mixed with a new savings culture taken on board by a public wary of the sort of global economic ructions which drew comparisons with the Great Depression.
"It was a scary time for some retailers, but while spending big dollars on new construction for this industry may, at times, seem counter-intuitive, it is an operational necessity underpinned by the knowledge that the retailing sector is a real survivor. In fact while we’ve seen some retailing sub-sectors decline others have flourished. That is a mark both of the idiosyncracies of the retail market and also of changing consumer culture and thus spending patterns,’’ Mr Lampard said.
Savills Victorian Retail Director Michael Di Carlo said retail services, formerly barely a blip on the radar, had in recent years grabbed a significant slice of the pie with now around 12 per cent of the retail mix, or more than one in ten shopfronts, in Melbourne CBD’s retail core.
"We are now seeing beauty salons, masseurs, gymnasiums, mind and body well being centres, nail salons, skin clinics, tailors, and perfumeries, make their presence felt, while cafes, restaurants and takeaway food services have grown from just 14 per cent of the market in 2000 to around 25 percent in 2014.
"These changes reflect obvious demographic changes in the CBD but also a wider cultural change right across suburban Melbourne with the significant trend to apartment living and eating out, a key element," Mr Di Carlo said.
Projects due for completion by May 2015 are Waurn Ponds Shopping Centre, Dandenong Plaza, Millers Rd Homemaker Centre, Central Shopping Centre in South Morang, Cranbourne Shopping Centre, The Mentone Centre, Pakenham Lifestyle Centre.
Planned for delivery in the first half of 2016 are Werribee Plaza’s 23,496 square metre extension in March and Eastland Shopping Centres 47,000 square metre extension in May.
